Software supply chain platform JFrog (FROG) has experienced robust growth, and the market has noticed, helping to send the stock up over 42% year-to-date. The software industry is undergoing rapid changes in the DevOps, DevSecOps, and MLOps environments. With products like JFrog Artifactory, JFrog Xray, and JFrog Advanced Security, the company has established itself as the go-to system of record for software packages and AI models.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Despite potential uncertainties ahead, JFrog’s performance suggests strong revenue growth, particularly in the cloud and security sectors. Recently, the company entered into a strategic collaboration agreement with Amazon Web Services (AMZN) to streamline customer cloud migrations, enhance resources, and speed up cloud migration. This has directly benefited companies like Fortra, a provider of cybersecurity and automation solutions, by optimizing their software development lifecycle for improved productivity and efficiency. JFrog’s solid financial performance includes top and bottom-line beats for the most recent quarter. Investors interested in exposure to technology stocks might find this a compelling option.
Growing Client Base and Strategic Partnerships
JFrog Ltd. is a global company providing a comprehensive software supply chain platform. The platform includes JFrog Artifactory, a software package repository, JFrog Curation, a package admission controller, JFrog Xray, a security scanner for software packages, and JFrog Advanced and Runtime Security, these optional add-ons enhance the security of select JFrog subscriptions. The company also offers ML, a solution for data science and MLOps teams; JFrog Distribution, a software package distributor; and JFrog Connect, a device management solution for IoT devices.
The company reported a substantial increase in customers with an annual recurring revenue (ARR) of over $100K, from 886 in 2023 to 1,018 by the end of 2024. Moreover, clients with an ARR greater than $1 million increased from 37 to 52.
In recent news, JFrog announced a strategic collaboration agreement (SCA) with Amazon Web Services (AWS) to facilitate JFrog customers’ cloud migrations. This partnership aims to deliver enhanced cloud migration speed, additional resources, and seamless procurement through AWS Marketplace.
Revenue and Earnings Jump
JFrog recently announced results for the fourth quarter and full year of 2024. Revenue for the quarter hit $116.1 million, marking a 19% increase year-over-year and beating analyst forecasts by $1.84 million. The company’s GAAP gross profit stood at $87.6 million versus a non-GAAP gross profit of $96.5 million. Although there was a GAAP operating loss of $25.4 million, the non-GAAP operating income was $20.9 million. The adjusted EPS of $0.19 topped consensus expectations by $0.05.
For fiscal year 2024, JFrog generated revenue of $428.5 million, marking year-over-year growth of 22%. The company’s GAAP gross profit was $330.2 million, whereas the Non-GAAP gross profit was higher at $359.1 million. Despite a GAAP operating loss of $91.1 million, the non-GAAP operating income totaled $63.3 million.
As of the quarter’s end, the company reported cash, cash equivalents, and investments rose to $522.0 million, with remaining performance obligations of $403.1 million.
Management has offered guidance for the first quarter of 2025, projecting revenue to fall within a range of $116.0 million to $118.0 million. Non-GAAP operating income is expected to be between $16.5 million and $17.5 million, with non-GAAP net income per diluted share estimated at $0.15 to $0.17. For the full fiscal year 2025, the company anticipates its revenue to be between $499.0 million and $503.0 million. Non-GAAP operating income is projected at $73.0 million to $75.0 million, with non-GAAP net income per diluted share ranging from $0.67 to $0.69.
Bullish Ratings
The stock has enjoyed a solid, though at times volatile, run, climbing over 83% in the past three years. It trades near the high end of its 52-week price range of $22.91 – $47.47 and demonstrates ongoing positive price momentum by trading above its major moving averages. It trades at a relative premium, considering its P/S ratio of 8.95x compared to the Information Technology sector average of 3.32x.
Yet, analysts following the company continue to be bullish on the stock. For example, Truist’s Miller Jump recently reiterated a Buy rating on the shares while raising the price target to $45 (from $35), noting strong Q4 results driven by outperformance in its SaaS business and strong growth in its Security products.
JFrog is rated a Strong Buy overall, based on the recent recommendations of 16 analysts. The average price target for FROG stock is $44.13, which represents a potential upside of 5.00% from current levels.
See more FROG analyst ratings.
Final Analysis on FROG Stock
JFrog has experienced significant growth and has become a preferred choice for managing software packages and AI models. The company’s numbers indicate ongoing revenue growth, especially in cloud and security sectors, driven partly by the recent partnership with Amazon Web Services. JFrog’s financial growth, expanded client base, and promising future projections position it as a potentially appealing option for those looking to invest in technology stocks.
